What is Debt?

Why do people, organizations and businesses have debt?

People and businesses have debt because they need or want to buy something, but they don’t have enough money to pay for it at the time. Adults sometimes borrow a large amount of money to pay for a house, a car, college tuition, medical bills, or home repairs.

Credit cards are also a form of debt. If you purchase a pair of shoes by charging it on a credit card, you are in debt to the credit card company until you pay your bill. Businesses borrow money to help pay their employees and buy expensive items such as buildings, computers, and other large purchases.